CMS publishes proposed rule on pass-through provider payments under Medicaid managed care contracts

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The Centers for Medicare & Medicaid Services (CMS) has published a proposed rule that would limit states’ ability to increase or create new pass-through payments for hospitals, physicians or nursing homes under Medicaid managed care contracts.

CMS previously provided for a 10-year phase-out of these pass-through payments, from 2017 to 2027. According to the proposed rule published Friday, Nov. 18, for state pass-through payment programs to qualify for the 10-year transition period, they had to be in place as of July 5, 2016.

The American Hospital Association (AHA) says it is very concerned that further limitation on pass-through payment programs could adversely affect hospitals dependent on the supplemental payments. The AHA has long advocated that states should be allowed to continue these types of supplemental hospital payments to support a variety of state-specific objectives within the context of managed care.

Comments on the proposed rule are due to CMS by Dec. 22.